Farmers fret over low milk prices

2013-07-23 12:52
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Cape Town - South Africans could be paying more for a litre of milk as dairy farmers feel squeezed by low prices paid by milk processing companies and rising input costs.

The price of milk will have to increase sharply to avoid a potential crisis, said the Milk Producers Organisation (MPO), according to BDLive.

The gap between South African producer and import parity prices is at the highest level ever, said MPO chairperson Tom Turner.

He claimed this shows how low the price paid to already struggling dairy farmers is.

Turner said it is unsustainable to keep prices so low.

"If local prices do not move up, something is going to break," he was quoted as saying.

He also took a swipe at Clover Industries [JSE:CLR], saying its increase of 15c/l is laughable.

Clover deputy CEO Manie Roode told Financial Mail in June that he was aware that producers are under pressure from inflation and the new minimum wages.

"As processors we assess the amounts we pay farmers on a monthly basis to ensure sustainability of supply but we have to take cognisance of the consumer too."

Ten years ago South Africa had about 7 000 commercial dairy farmers, but by the end of this year only 2 000 are expected to remain, reported Landbou.

 - Fin24

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